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1 GUIDANCE MATERIAL GUIDANCE ON THE USE OF POSITIVE PERFORMANCE INDICATORS TO IMPROVE WORKPLACE HEALTH AND SAFETY Office of the Australian Safety and Compensation Council NOVEMBER 2005

2 IMPORTANT NOTICE The Department of Employment and Workplace Relations through the Office of Australian Safety and Compensation Council (Office of the ASCC) makes the recommendations given in this document to improve public access to information about occupational health and safety information generally. The vision of the Office of the ASCC is Australian workplaces free from injury and disease. Its mission is to lead and coordinate national efforts to prevent workplace death, injury and disease in Australia. The information provided in this document can only assist you in the most general way. This document does not replace any statutory requirements under any relevant State and Territory legislation. The Office of the ASCC accepts no liability arising from the use of or reliance on the material contained in this document, which is provided on the basis that the Office of the ASCC is not thereby engaged in rendering professional advice. Before relying on the material, users should carefully make their own assessment as to its accuracy, currency, completeness and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances. To the extent that the material in this document includes views or recommendations of third parties, such views or recommendations do not necessarily reflect the views of the Office of the ASCC or indicate its commitment to a particular course of action. Commonwealth of Australia (Department of Employment and Workplace Relations) This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General's department, Robert Garran offices, National Circuit, Barton ACT 2600 or posted at i Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

3 i Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

4 Foreword FOREWORD This document provides practical assistance for use by employers, workers, health and safety representatives, OHS committees, OHS professionals, and other related parties. Except where made mandatory by or under a law of the Commonwealth, a state or a territory, materials issued by the Australian Safety and Compensation Council (ASCC) are of an advisory nature. The ASCC leads and coordinates national efforts to prevent workplace deaths, injury and disease in Australia. Through the quality and relevance of the information it provides, the ASCC seeks to influence the awareness and activities of every person and organisation with a role in improving Australia s occupational health and safety (OHS) performance. More specifically, the ASCC aims to: support and enhance the efforts of the Australian Government and State and Territory governments to improve the prevention of workplace deaths, injury and disease work in alliances with others to facilitate the development and implementation of better preventative approaches, and ensure the needs of small business are integrated into these approaches. The National OHS Strategy , which was endorsed by the Workplace Relations Ministers Council on 24 May 2002, records a commitment by all Australian, State and Territory governments, the Australian Chamber of Commerce and Industry and the Australian Council of Trade Unions to share in the responsibility of ensuring Australia s performance in work-related health and safety is continuously improving. This National OHS Strategy sets out five national priorities to achieve short-term and long-term improvements. Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety ii

5 These priorities are to: reduce high incidence and high severity risks improve the capacity of business operators and workers to manage OHS effectively prevent occupational disease more effectively eliminate hazards at the design stage, and strengthen the capacity of government to influence OHS outcomes. In line with these priorities, the ASCC declares national codes of practice under section 6 of the Australian Workplace Safety Standards Act In common with other ASCC documents, this guidance note is an advisory instrument only. iii Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

6 CONTENTS INTRODUCTION PART 1 HEALTH AND SAFETY PERFORMANCE MEASUREMENT What is OHS performance? Why do we measure OHS performance? OHS performance indicators Using PPIs to drive OHS activities PART 2 DEVELOPING AND USING POSITIVE PERFORMANCE INDICATORS STEPS TO DEVELOPING PPIs Step 1 Develop a risk profile for the organisation and/or identify OHS outcomes of concern Step 2 Review current arrangements for managing OHS to identify areas for improvement Step 3 Define key OHS outcomes that need to be achieved within set timeframes Step 4 Develop core PPIs based upon the areas of focus for improvement Step 5 Ensure that the selected PPIs meet relevant essential criteria Step 6 Determine how each PPI is to be collected, calculated and frequency of reporting Step 7 Conduct performance measurement using selected PPIs Step 8 Monitor and review Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety iv

7 Contents APPENDIX 1 Examples of Performance Indicators against each of the OHS Management System Core Categories APPENDIX 2 Small Business Examples of Performance Indicators against each of the Core Categories APPENDIX 3 Additional Information for Small Business APPENDIX 4 Additional Information on OHS Performance Measurement APPENDIX 5 Categories of PPI and Quality Model for Process Improvement Matrix APPENDIX 6 Categories of PPI and Quality Model for Process Improvement Matrix Small Business OCCUPATIONAL HEALTH AND SAFETY ORGANISATIONS GLOSSARY OF TERMS REFERENCES FIGURES Figure 1 Quality Model for Process Improvement TABLES Table 1 Types of Performance Indicators v Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

8 Introduction INTRODUCTION This Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety provides information and advice to employers, workers, unions, occupational health and safety practitioners, managers, health and safety committees and representatives and other interested persons. It develops and enhances the management of occupational health and safety (OHS), and minimises the risk of injury and disease to persons in the workplace. Positive Performance Indicators (PPIs) focus on assessing how successfully an organisation is performing through monitoring the processes which should produce good OHS outcomes. PPIs can be used to measure relevant OHS systems, processes, management and compliance with OHS practices in the workplace. This guidance has evolved from earlier work by the ASCC on performance indicators in the construction industry, and is primarily designed for organisations in the construction, health and community services, manufacturing, and transport and storage industries. Organisations in other industries should also find the information useful. Part 1 Health and Safety Performance Measurement provides information on what health and safety performance is, for what purposes it is measured, and how PPIs can be used to drive and monitor improvements in the management of health and safety at work. Part 2 Developing and Using Positive Performance Indicators describes a principle-based approach and step-by-step process to follow when developing PPIs for use in your organisation. It includes examples and tools to assist you in this process. The methodology outlined is generic and is suitable for use in small to medium enterprises as well as in larger organisations. The content and scope of any developed PPI are dependent upon the specific needs of an organisation and on the scale and maturity of any systems in place for the management of OHS. Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 1

9 2 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

10 Part 1 Health and Safety Performance Measurement PART 1 HEALTH AND SAFETY PERFORMANCE MEASUREMENT Key Points 1. What is OHS performance? 2. Why do we measure OHS performance? 3. OHS performance indicators 4. Using PPIs to drive OHS activities 1.1 What is OHS performance? OHS performance can be described as a measure of the level of effectiveness of those business activities aimed at the prevention of injury and disease to persons in the workplace Depending upon what aspects of OHS performance are being measured, this evaluation may demonstrate: historical OHS performance and performance trends compliance with statutory obligations visible commitment to duty of care responsibilities, and good management practices. 1.2 Why do we measure OHS Performance? The OHS performance of an organisation may be measured to satisfy a number of different needs from a number of different stakeholders. For this reason, it is important to first establish how performance information is to be used prior to the consideration of any specific performance indicators. Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 3

11 Part 1 Health and Safety Performance Measurement Organisations typically measure performance to determine whether objectives or targets are being met and can involve either outcomefocused or process-focused indicators of performance. Traditionally, many organisations have used outcome measures to monitor their OHS performance. Outcome indicators, such as Lost Time Injury Frequency Rates (LTIFRs), measure if an organisation is achieving its targets PPIs on the other hand are used to measure how well arrangements for workplace health and safety are performing. PPIs can also identify areas where improvement strategies can be targeted. When PPIs are used to complement the information obtained from outcome measures, they can significantly enhance the quality of OHS information which can then be used to assist in the development of improvement strategies within an organisation There is no substitute for designing good OHS practices into the workplace and using the information collected from a mixture of outcome and process indicators to further improve those processes The main reasons for measuring OHS performance, using PPIs, are: a) To minimise the occurrence of workplace injury/disease by reducing the level of risk at work i) The most important reason for measuring OHS performance is to monitor the level of success of activities aimed at preventing workplace injury and disease and to identify OHS areas for improvement. b) To provide informative feedback mechanisms i) Monitoring and recording of OHS activities and initiatives in the workplace can provide effective immediate feedback to employees and managers as to whether or not the things that should be done, are being done. This information provides an indication of commitment to OHS improvement by management. The types of performance indicators that would be used in this instance would tend to be key activity PPIs. c) To provide a measure of sound management and corporate sustainability i) Institutional investors have significant interest in OHS performance as a component of corporate social responsibility and socially responsible investment. Investors are generally supportive of the idea that good OHS performance is an indicator of good management. 4 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

12 Part 1 Health and Safety Performance Measurement ii) Investors are interested in OHS performance indicators that are relatively few in number, relevant to the industry in question and that are comparable between companies, ideally on a global scale (Mansley, 2002). It would appear to date, investor interest has mainly been in the area of bottom-line outcome indicators. d) To facilitate a process of OHS benchmarking between organisations and industries i) Benchmarking, or measuring your company s processes and/or performance outcomes against another, when applied in the field of OHS, has tended to focus on outcome indicators as opposed to PPIs. This has occurred for two principal reasons. Firstly, when organisations compare performance, they tend to focus on the bottom-line results that impact on their business, such as accident and/or compensation claim costs, fatality rates and incidence rates. Secondly, because PPIs are often developed to meet the specific needs of an organisation, it is often difficult to find similar organisations that are measuring exactly the same things. For this reason PPIs have only a limited application in benchmarking, and more work may need to be undertaken within industry groups to develop appropriate and relevant measures for their needs. 1.3 OHS performance indicators The New South Wales Health Department (1998) defines a performance indicator as a statistic or other unit of information which reflects directly or indirectly, the extent to which an anticipated outcome is achieved, or the quality of processes leading to that outcome 1. In order to measure particular aspects of an organisation s OHS performance, performance indicators need to be developed for areas that are to be evaluated Performance indicators can be either: Quantitative an indicator that can be counted or measured and is described numerically. For example, number of safety audits conducted, injury frequency rates. Qualitative an indicator that would describe or assess a quality or a behaviour. For example, employee ratings of management commitment to achieving best practice in OHS. 1 Cited in OHS Performance Measurement in the Construction Industry, Development of Positive Performance Indicators, NOHSC Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 5

13 Part 1 Health and Safety Performance Measurement Measurement of safety performance can involve either outcome-focused or process-focused (also known as positive) indicators of performance. These two types of measures fulfil different roles and are therefore best used in combination. Traditionally, many organisations have used only outcome measures to monitor their OHS performance. Outcome indicators focus on the measurement of loss, such as lost time injury frequency rates (LTIFRs), workers compensation costs or fatality incidence rates. These indicators are generally measures of failure to control or manage risks. Lost time injury frequency rate has long been regarded as the standard for the measurement of OHS performance. However, it is increasingly recognised that these outcome indicators are limited in their use as the numbers recorded are generally low, which makes establishing trends difficult. In addition, outcome indicators give no indication of how to address key risks and are therefore not appropriate for identifying problem areas. The failure of outcome indicators on their own to adequately reveal how well OHS is managed in the workplace has established a need for additional measures of OHS performance such as PPIs. These measures are aimed at evaluating the management of OHS in an organisation and highlight the areas in health and safety where systems and procedures could be improved. These indicators are often described as process or positive measures of performance (NOHSC, 1999). PPIs focus on assessing how successfully an organisation is performing by monitoring the processes that provide good OHS outcomes. PPIs can be used to measure activities undertaken to positively impact on outcome performance in the workplace, and to identify problem areas where additional preventative action is required. PPIs can be developed on an organisation/industry basis, or on a departmental/workgroup basis, and normally involve consultation with employees and other stakeholders in the development of relevant measures. Examples of PPIs include: the number of safety audits conducted the percentage of sub-standard conditions identified and corrected as a result of a safety audit, and the percentage of employees receiving OHS training. 6 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

14 Part 1 Health and Safety Performance Measurement Advantages of using PPIs to supplement outcome indicators to measure OHS performance include: the ability to measure and evaluate the effectiveness of OHS management the provision of immediate feedback mechanisms regarding the management of OHS, and being able to make immediate improvements to OHS performance, if required When used in conjunction with outcome measures, PPIs can offer a comprehensive overview of health and safety management performance and assist the search for the underlying causes of work-related injury and illness (NOHSC,1999; Bottomley, 1994). For this reason, it is important that organisations develop and use a balanced mix of both outcome indicators and PPIs to effectively measure OHS performance The notion of using PPIs to improve OHS performance has evolved from the model of process control in quality management. In this model, process steps leading to sub-standard outputs are defined and examined to identify factors that have caused this sub-standard output. By addressing these factors in a timely manner, the standard of the output can be improved. When this process is applied consistently over time it leads to a cycle of continuous improvement (refer Figure 1). The quality management model at Figure 1 can be applied to the process of OHS management. Figure 1 Quality Model for Process Improvement Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 7

15 Part 1 Health and Safety Performance Measurement Table 1 - Types of Performance Indicators Input Key OHS Activities Positive Performance Indicators Process Monitoring Key Risks Output Progress Towards Goals Goals Outcome Indicators Outcome Targets Audit undertaken to identify hazardous materials Training in hazardous materials storage and handling instructions provided to staff Observed that hazardous materials being stored and handled correctly Number or % of staff competent in hazardous materials storage and handling requirements Storage and handling instructions developed for all hazardous materials, and understood by staff X% reduction in the incidence of workplace injury Areas where storage and handling targets are not met (eg by sector or by hazard risk) are identified Equipment provided and staff trained in safe work from heights procedures Observed that fall arresters being used at heights Number or % of staff competent in safe working from height requirements Reduction in falls from heights Areas where improvement is required are identified Table 1 outlines the main types of OHS performance measures currently used in Australia. Through considering the Quality Model for Process Improvement as applied to the management of health and safety, it provides some examples of each type of indicator. 8 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

16 Part 1 Health and Safety Performance Measurement PPIs are measures of actions or initiatives introduced to prevent workplace injury and disease. In the model for process improvement, PPIs may be one of the following: a) Inputs (Key Activities) i) Input PPIs are measures of what actions or initiatives have been undertaken in the workplace to improve OHS and can provide useful information on participation, leadership and communication. Although they are seen as good indicators of commitment and effort, they are not indicators of the effectiveness of the activities. ii) In practical terms, organisations will need to define those activities in their safety management system that need to be promoted and reinforced. A focus on these activities can be used to visibly drive the safety culture in the workplace. PPIs can be developed for these activities. b) Processes (Monitoring Key Risks) i) Process PPIs are measures that are used to monitor the major risks in an organisation. These can be developed by identification of the key contributors to the outcomes of concern and developing measures to monitor behaviours and practices. For example, if a high incidence of eye injuries was an outcome of concern and key contributors to this incidence were factors like poor screening of hazardous work (e.g. welding) and low use of personal protective eyewear, then performance measures would be developed to monitor these practices. ii) In developing PPIs of this type, organisations should focus on all core risks and ensure that measures are in place to provide an indication that risk control practices are being followed. c) Outputs (Milestones) i) Output indicators are used to measure outputs in terms of the achievement of objectives, and on the progress towards the achievement of higher level OHS goals and targets. For example: if the goal is that within a particular time period, storage and handling requirements for hazardous materials are understood by staff, a suitable indicator of this type would be number or % of staff competent in the storage and handling requirements for hazardous substances. Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 9

17 Part 1 Health and Safety Performance Measurement 1.4 Using PPIs to drive OHS activities The systematic management of OHS The National OHS Strategy , which forms a framework for the sustained and continuous improvement in Australia s occupational health and safety performance over the next decade, advocates that all workplaces adopt a systematic approach to OHS risk management as part of their daily business operations This systematic approach stems from a need that, in order to improve the level of OHS performance, the focus of OHS management has to shift from a peripheral position to one of total integration into an organisation s management systems. For this to occur, managers must see good OHS performance as a critical part of good sustainable business practice. To achieve this, a reliable system for OHS performance measurement, in terms of evaluating the systematic management of health and safety in the workplace, will need to be developed and used. This is the role of PPIs It should be noted that, unless an organisation has a systematic approach to the management of OHS, and in particular to the planning of prevention activities, then PPIs will be of little assistance This systematic approach can take many forms but usually consists of a number of key elements that together are often referred to as an occupational health and safety management system (OHSMS). There are many variations of OHSMS in use, but all have the following principles: commitment and policy planning implementation measurement and evaluation, and review and improvement As the format of an OHSMS will be based on the core functions of an organisation, and be appropriate to the specific needs of that organisation, the type and complexity of the OSHMS in place may range from highly developed systems that are independently audited against a formal standard for certification, to less structured informal management processes that are not regularly reviewed. Many small to medium enterprises (SMEs) with limited access to OHS resources are likely to have a basic management system, or no formal management system at all. 10 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

18 Part 1 Health and Safety Performance Measurement In all cases the systematic management of health and safety at work should have the process of risk management principles at its core. That is, the identification of hazards, assessing the risk associated with those hazards and applying measures to control the risks, should form the focus of OHS management effort in any organisation, irrespective of its size. Other important components in an OHSMS include responsibility and accountabilities of key staff, competencies for managers and staff, policies and procedures, emergency preparedness, monitoring and review, and plans for continuous improvement Accordingly, it follows, that the type of OHSMS that an organisation has in place, and the nature of the risks that it needs to control, will ultimately determine the types of performance measures that it will need to develop to evaluate the effectiveness of that system. Categories of PPIs While individual PPIs will need to reflect the characteristics of the OHS problems and strategies applying to particular industries, organisations and workplaces, there are a number of core categories of PPIs that are common to most large organisations. For the purposes of this guidance, the categories of PPIs outlined below represent those principles and elements incorporated into the OHSMS model for continuous improvement. Commitment and policy measures demonstrated commitment to improve OHS performance Planning measures what procedures are in place to eliminate workplace injury and disease Implementation measures the capability and support mechanisms that are necessary to achieve OHS objectives and targets Measurement and evaluation measures the extent to which workplace health and safety is monitored and evaluated so that issues can be identified and corrective action taken, and Review and improvement measures the effectiveness of the OHS management system, and its continuing suitability These PPI categories are not considered to be the definitive set, and organisations may wish to use alternative categories that follow more closely the elements in their own OHSMS. Within each of the above core categories there are a number of sub-categories. Examples of these are provided at Appendix 1. Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 11

19 Part 1 Health and Safety Performance Measurement Categories of PPIs Small Business Small business may also wish to measure their OHS performance using PPIs. In recognition of the needs and limited resources of small business, an alternative example of core categories, of PPIs is provided below. These indicators 2 reflect processes designed to maintain a high level of OHS. risk management workplace hazards are identified and associated risks eliminated or controlled management of work processes safe systems of work implemented participation, communication and skills employees are trained and educated and are actively involved in problem solving planning, design and procurement OHS is addressed in the design, planning and procurement phases and activities of the project, and monitoring and review OHS is self-assessed and/or independently audited for effectiveness of systems and practices. When selecting PPIs, choose a range of indicators to cover all of the categories listed above. Within each of the above categories there are several sub-category examples of which are provided at Appendix 2. In addition, further information on useful resources available for use by small business, is provided at Appendix 3. This includes tools and checklists that may be used in the identification and control of workplace hazards. Selection of PPIs More information on the selection and use of PPIs will be provided in Part 2 of this document, but in general the following issues need to be considered when selecting PPIs: a) The categories of PPIs should reflect the elements of the OHSMS (or in the case of small business, the processes designed to maintain a high level of OHS) in any specific workplace, and should measure the most significant risks in the workplace. It is what matters most that should be measured. In addition, it should include at least: hazard identification risk exposure risk control measures, and attainment of competencies in OHS by managers and staff. 12 Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety

20 Part 1 Health and Safety Performance Measurement b) The types of PPIs selected, as outlined in the adapted Quality Model for Process Improvement at page 6, should also reflect the needs and priorities of the organisation. For example, INPUT PPIs can be used as a measure to ensure that commitment and effort continues as planned. PROCESS PPIs can be used to monitor key risks, and OUTPUT PPIs can be used to measure progress towards specific goals. c) Organisations should avoid selecting too many PPIs. The task of collecting information on a large number of indicators may result in an evaluation system becoming unworkable. It is better to start with a small number of PPIs and develop additional measures as the OHSMS matures Studies in industry have demonstrated that PPIs can effectively be used to monitor and promote implementation of an OHSMS and achieve improvements in OHS outcomes. In addition, they may form the basis for evaluating the effectiveness of individual OHS management strategies where OHS objectives, management plans and expected outcomes are defined (Simpson, 2001) Additional information on OHS performance measurement is provided at Appendix 4. 2 The categories of PPIs were developed by NOHSC for the construction industry. The five categories were agreed as being applicable to the wider industry at a workshop. Extending the Use of Positive Performance Indicators in Australian Industry, held in March Guidance on the Use of Positive Performance Indicators to Improve Workplace Health and Safety 13

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